The chairman of a major credit-guarantee company donated a combined 8 million yen to a senior lawmaker of the ruling Liberal Democratic Party and a prefectural assembly member in 2005 in a bid to quash a probe by tax authorities into his company, sources alleged Monday.</PARAGRAPH> <PARAGRAPH>Tadatoshi Asakawa, who was chairman of Zenkoku Hosho Co., gave 5 million yen to LDP Deputy Secretary General Kazunori Tanaka and 3 million yen to Nobuo Sugiyama, a member of the Kanagawa Prefectural Assembly, at a dinner funded by the company last Nov. 24, the sources said.</PARAGRAPH> <PARAGRAPH>Asakawa hosted the LDP House of Representatives lawmaker and the prefectural assembly member at a restaurant in Tokyo's Ginza district following the Oct. 5 launch of an investigation by the Tokyo Regional Taxation Bureau.</PARAGRAPH> <PARAGRAPH>'Around last November, I was told by the chairman that he had asked politicians for a favor' in the tax probe, one of the sources said.</PARAGRAPH> <PARAGRAPH>Tanaka and Sugiyama acknowledged they received the money but claimed it was a political donation and denied they were asked to interfere with the investigation, the sources said.</PARAGRAPH> <PARAGRAPH>'I heard –

complaints about the taxation probe, but I was not asked to do anything specific and did not do anything," Tanaka was quoted by his office as saying. "I understand the donation was made as a token of congratulation on my victory in the general election" in September.

Meanwhile, Sugiyama also denied the connection between the tax probe and the donation.

"I received 3 million yen in an envelope. The tax probe was one of the topics discussed, but I was not asked to do anything," Sugiyama said.

According to political funds reports, the Lower House member received 8.4 million yen from Zenkoku Hosho in 2005, compared with 1.2 million yen in 2004, while Sugiyama received 5.4 million yen in 2005, up from 1.2 million yen in 2004.

The tax bureau determined that Zenkoku Hosho concealed about 170 million yen in taxable income in the year to the end of March 2005.

The tax bureau found that 120 million yen was paid to Asakawa as a rebate from a construction company that had received an order for a condo project of Zenkoku Hosho, and it should have been reported as miscellaneous revenues, the sources said.

A finance company affiliated with Zenkoku Hosho also concealed about 50 million yen in taxable income.

The company was ordered to pay tax on the concealed income and penalty taxes, the sources said.

In late June, Asakawa, 54, citing health reasons, resigned as chairman of Zenkoku Hosho, which was established in 1981 as an agency to guarantee repayments of public housing loans.